Ukraine today said the International Monetary Fund has postponed a board discussion on disbursing a new USD 1-billion loan tranche after Kiev cut trade links with Russian-backed rebel eastern regions.

"The IMF board of directors has postponed for a short period the review planned for Monday of the issue," Ukraine's finance ministry said in a statement.

There was no separate confirmation from the IMF.

Cash-starved Ukraine is desperately waiting for the next instalment of a USD 17.5 billion rescue programme that has been held up repeatedly since it was agreed in 2015 over delays by Kiev to carry out reforms.

The IMF and authorities in the ex-Soviet nation reached a preliminary agreement earlier this month to pave the way for the board to discuss handing out the fourth slice of the mammoth loan.

But that deal appears to have been rocked by Ukraine's decision on Wednesday to halt trade with pro-Moscow insurgents that it has been battling since 2014.

The pro-Western leadership in Kiev took the drastic step after rebels seized dozens of Ukrainian-owned businesses on their territory in response to a trade blockade by nationalist protesters.

Kiev also slapped sanctions on the Ukrainian subsidiaries of five Russian banks -- including state-run giants Sberbank and VTB -- in part over Moscow's decision to officially recognise identity documents issued by the rebels.

Ukraine's finance ministry said the IMF delayed the loan disbursement discussion as the economic impact of these measures needs to be tallied up, but insisted the loan disbursement would get back on track soon.

"Clarifying these calculations is important for both sides to ensure the maximum effectiveness of the programme," said finance minister Oleksandr Danylyuk.

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